Now now...not many know the italian labour market as it seems that in italy its hard to fire.Fat lie...over 50% of the work force hired since 2009 is in what its called project conctract or the english equivalent of a temp.

So the contractual forms are there for an extremly flexible labour market. In fact is even more flexible then its northern european counterparts.

The real italian problem are the internal consumes. As the real problem with debt are the interests on the massive real debt on the nations back.

As for the advance over expenses...italy has been like that for over 20 years right now. And lets analize the 3.2 positive advance in expenses...over 0.5% must be cutted because of inbalances between the two major pensions institutes (inps and ipdap) also it doesnt
reflect the reale expenses but what has been given. In other words it states what the state will give not what it actually owes. How is it possiblle to have 3.2% of advance and 80 billions of debts towards internall firms who have had credits towards the state even for the past 10 years?

So, once again we play on statistical data to mantain an unsuccesful but flexible managment of the servitude....

The problem in italy, since 2003, are many. Mainly internal consumes, credit from the banck system wich works only for a few an, last but not least, huge levels of corruptions.

There are many other but, unfortunately, as many other articles that are from the mainstream medias they are not addressed.

Monti did just kept the same line as tremonti did making manovers that keep the status quo of an incompetent management class which are to depressive towards the entire system. In economical words, he kept the debt high and did not do anything for the growth.

All this, paired with the eu currency board, gives us the mess we are in where old theories do now explain the situation.

For example spain has extremly low wages, taxes on eu level, a liberal housing market BUT doesnt work just the same.

Maybe, as stiglitz sayd when he schooled (and by schooled i mean it) Mario Monti on his mistakes, we should start to think out of the box and start to be practical towards monetary and production policies that actually work.

Right now europe is a group of countries that compete one with the other for their own richness. It doesnt work ad the game theory demonstrated, internally, a system needs to cooperate otherwis it will be unefficient. Right now the central bank does the interest of the more strong eu countries (england, germany and france. Yes, england has got a huge amount of the CB shares and influence over it and its right like that).

This wont work. As it wont work if the corruption problems in our countries wont be addresses as they are not right now.

The structural reforms were all very good, but as TE points out, it's not as if the Italian economy has taken off since Mr Monti was instituted (quite the opposite). Perhaps combining demand side with supply side policies would have been the better option. On hopes that Mr Monti will reconsider his irrational opposition to Keynesian economics.

he banks want Monti to go on with his government. But the government is in a big trouble with debt. The only thing government can do is to reduce their tax rate and public service to let people satisfied with their work. And o lot of their business and income is controlled by their oligarchy and the government make this debt makes them hurry to reduce the economy's burden and let economy stick in to mire. But, if EU can give help immediately, Italy’s economy will recover as soon as possible.

The liquidity crisis and resulting non-payment problems are causing the economy to grind to a halt. The Italian government owes its suppliers 70 billion euros and does not pay for 6-12 months, if that. This has a cascading effect throughout the economy.

And in the meantime, our pensioners, especially the golden pensioners who receive from 3000 to 90,000 euros MONTHLY, do not have to wait a single day to receive their exaggerated payments. This situation is clearly unsustainable and is killing our economy. The number of subjects both private and corporate that pay taxes are evaporating by the thousands on a monthly basis. This level of taxation, aimed mostly at paying interest on our debt and exaggerated pensions of the past, is way beyond anything Laffer ever imagined.

I spoke to a third-generation Milanese millionaire industrialist some months ago. He told me he was going into retirement at 72 - with a pension of 1200 euros. His wife, having worked as a secretary at the family firm for 40 years, was retiring with 800 euros.
There are no ex-workers and few ex-industrialists who are receiving these pensions. They are mostly politicians and ex-boyars of the State: generals, executives of State enterprises, the "underbrush" of the State.
Basta!

"Mr. Monti, who at 69 years old receives a €72,000 monthly pension, has done nothing to trim back these excesses."
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Joe, I agree with you on this pension issue, and find these golden pensions nothing short of obscene.

However, it takes very patient electorate to let ANY government get enact austerity measures without slashing these pensions FIRST. That'd be unthinkable in the US or Northern Europe, as you will know.

Small detail: I read somewhere earlier this year that if Angela Merkel retired today, and simultaneously ceased being chancellor and quit parliament (and hence be in Monti's shoes), she'd received less than 5,000 euro/month – AFTER SHE'D TURN 62 (4 years from now)! Until then, she'd either have to live out of her piggy bank or look for a job. And this after 7 years in the job, and not 1 year (as Monti).

Just saw your posting now. I am glad to see we are in such agreement about something ;-)

Yes, despite my many criticisms of German policy, when it comes to the pay and pensions of your politicians, I have nothing but respect for what are entirely sound and decent policies.
Italy's pension policies represent a couple of good ideas and cultural values that have become wholly perverted and exaggerated.
Let's not forget Luis Durnwalder - President of the Semi-Autonomous Province of Bolzano/Bozen (pop. 500,000): his salary is 28,000 euros per month. Merkel's is 25,000.

Cicciolina turned 60 last November, and now collects 3000 euros monthly for the 4.5 years she spent in our parliament 25 years ago.
Truly obscene - I am convinced she is the poster girl for the Parliament of our Christian-Democrat-dominated, so-called First Republic.

these blogs bring out the worst in anyone (even Forlana is going crazy – go see for yourself LOL), and you and I are definitely no exception... . But that doesn't mean I don't agree with you every once in a while, and sometimes I even admit it;-).

As for Cicciolina, I hope the "services rendered" in Italian parliament during her short stint there were of the more memorable kind so that the Italian Republic (by way of its elected officials) at least got its money's worth;-). I can't quite imagine her having done serious committee work, to be honest.

This article was very interesting because it touched on a major point and that is how the debt has become a rising problem and possible ways that it can be avoided and fixed. Monti’s government might not have been the most popular but it is providing Italy with a chance to get out of the recession. It is stated that the European Commission expects that there will be a primary budget surplus of around 3.5% of GDP next year. Also, the debt is thought to fall by around 4% by the middle of the decade. One of the main equations that is being applied in my Money and Banking course right now is the equation of exchange which is P × Y = M × V. We can look at this as being applied to what Monti is trying to accomplish because he is trying to even out the economy and restore it to balance. By decreasing the national debt and the GDP this will potentially increase the CPI which means that the households will be spending more on goods and services. This will increase the economy because people will be putting more into the economy. Another important aspect that we can look at here is the idea that the government needs to have a major focus on ensuring that the unemployment rate falls. This will also in turn go back to the equation of exchange in the sense that the people will have more to put into the economy in terms of money which will increase velocity which will in turn increase GDP.

How people will spend more if their saving are depleted? The national debt is not decreased, but it happened the exact opposite (before Monti 1900, now almost 2000b). In truth, this is because Monti's government has to deal with the burden of a huge payment in interest regularly (so new emission of treasury bond to cover it). What has Monti done? He increased taxation to reduce the debt, hence this is not going to help consumer demand. Moreover, due to a non-collaborative parliament the technocrats' government will not be able to procede with an effective spending review. Cutting costs was probably the most important intervention that should have been done.

In Italy, the quickest solution is to permit flexible jurisdictions. For instance, Italian businesses selling to one another should easily be able to declare their contracts as under Dutch jurisdiction and fully enforceable in Dutch courts.

That way, there will be far greater pressure on the Italian legal system to raise standards - and Italian businesses will have the legal redress they need for actually investing, lifting productivity and entering new markets.

I suppose one of the main issues is whether the Italian plebiscite will endure the unpleasantness of putting the economy back on the right track. The Berlusconi years were an orgy of mismanagement and feel-good politics. That certainly didn't work. Italy must continue to function in a global marketplace, so complaining about the market's judgments is a waste of breath,...the "market" will follow it's own course, self-interest or not. In the meantime, it is clear that labor reform, more efficient administration and collection of existing taxes, and support for a more meritocratic system, and continued efforts to lessen corruption will benefit the country in the long term.

No, excuse me, your judgments are based upon journalistic analysis. These are not the problems. This article represents a long list of ideological attacks. Even the rankings are ideological and not objective in their assessments.
None of the problems cited are any worse than they were in the past when our economy was booming. Granted, the world has perhaps improved on these counts - but are you really telling me that the BRIC countries do not have serious corruption problems?

What has changed is that taxes (and fines) ARE being levied and collected aggressively. The banks have terrified Italian businesses into holding onto every cent they can - often not paying suppliers. The government has terrified Italian businesses into not making any investment moves. Half the country is living like a deer caught in the headlights of the on-coming vehicle.

What is killing the country - wholly unmentioned in this article - is our excessive pension expense, deriving not from current retirees but from those prior to the Maastricht-era reforms of the 1990's. Our pension expense is 16.6% of gdp - the highest in the world. The next most generous country is Austria at about 12%. If our pensions were at Austrian levels, we would have a 2% budget surplus at the moment.
Mr. Monti, who at 69 years old receives a €72,000 monthly pension, has done nothing to trim back these excesses.

I hope the future Centre-Left government will attack these "Golden Pensions", without scaring those retirees who are receiving €500-1500 monthly, but there is no clear assurance on this point. So, a large part of our political elite (and not only) are willing to espouse these ultra-free market ideas - making war on the middle class so as to not touch their own exaggerated pensions.

I must accept that I will never again have steady employment and must invoice all my individual jobs, competing in bid processes for each week's or month's work? Paying "corporate" taxes of 60%? I have a better idea: from now on, the university professors who support these ideas must lose their tenure - from now on they will bid on each semester's course - and the lowest bid will be awarded the 3-month or 4-month course.
And politicians, when they run for office, must write in next to their name the amount of pay they would accept for that office - so that the voters may also choose the lowest bid. I am sure we can find someone willing to be a Senator or Deputy for free... Same process for the cabinet Ministers. Who, in addition to offering competitive bids for their services, should then face the indignity of having to wait 6-12 months to get paid, as I do.

What do you expect? The country is now run by a merchant banks'dummy (a former Goldman Sachs advisor!)and thanks to him Italy is going through a certain 'hunting close season'. That the reason of the low spread and the so called 'credibility' of Italy's present situation. The banks want Monti to go on with his government. But next year the country will probably be run by a a former communist, Mr Bersani, and then the people have to be ready for the worst: the markets, the rating agencies will all then open fire against Italy. They will rightly lash the hell against a country run by communists, if they are not silly and do not want to lose their money. You can't back the wrong horse!